Uncovered Interest Parity between Australian dollar and Singapore Dollar
Uncovered Interest Parity between Australian dollar and Singapore Dollar
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Uncovered Interest Parity between Australian dollar and Singapore Dollar. ” Deviations from the uncovered interest parity”. Just the analysis without Introduction or conclusion. I also need the sources you collect the data and Excel files of works.
Deviations from the uncovered interest parity If the UIP condition holds, the exchange rate that was predicted from
the interest rate differential 30 days prior to today would equal to the currently observed exchange rate.
If the UIP condition does not hold, there would be deviations (i.e., differences) between the
predicted exchange rate and actual realized exchange rate. Present (1) time-series of the predicted and actual realized exchange rates in one figure, and(2) time-series of the deviations between them in another figure.
Identify the periods, if any, where the UIP appears to have been significantly violated.
Since the UIP condition can be represented in different ways, deviations from the uncovered interest rate parity can be represented in different ways as well. One form of
deviation is a difference between the forecasted and actual exchange rate, as discussed above. Another
form is a difference between percentage change in the exchange rate and interest rate differential.
Present a scatter plot where the yaxis is an interest rate differential and the x-axis is percentage change in the exchange rate. Discuss whether your data points lie on the 45-degree line through the origin.
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